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I have been designing a mobile version of a very powerful and interactive site.
At first, I considered finding a way to shoehorn the current site into a phone, using things like XSLT [w3schools.com] to transform it all, but I decided that it was far too much work for almost unusable (and expensive) results.
Instead, I have chosen to completely rewrite the site for mobiles, using a lot of the same priorities as outlined in this article (I still use a lot of XSLT, but just to transform portions of the content).
I use a first-generation MOTO RAZR as my mobile reference. It has an awful UI, and can't accept big content. I make sure that the site is usable on the RAZR, which is quite a challenge.
One big deal is the amount of data you transmit. Some people think that it's OK to transmit 100KB of page data, then hide 75KB with a media="handheld" CSS file. The problem is that the phone receives all that data, and the user has to pay for it in both time and money.
I've designed my mobile interface to present the site in very simple, hierarchical contexts. Each context can be navigated in small, easily-digested pages. Large pages are broken into a series of pages, so the user only receives (and pays for) the data in which they have an immediate interest.
I've found that the iPhone users actually prefer the full site, even though it is slow, so I present iPhones with the full XHTML, even though they are mobiles. I still need to test for Touch iPods.
Just my $0.02